The Chinese central bank has to circumvent offshore imports-driven inflation due to Renminbi currency misalignment.

Amy Hamilton

2019-07-07 18:36:00 Sun ET

The Chinese central bank has to circumvent offshore imports-driven inflation due to Renminbi currency misalignment. Even though China keeps substantial foreign reserves in U.S. government bonds, traders may still speculate whether the People Bank of China (PBOC) can fix the Dollar-Renminbi exchange rate below 7.0x. This current exchange rate has substantially declined about 9.3% since April 2018 and now hovers in the stable range of 6.89x-6.92x. PBOC Governor Yi Gang indicates that there is no asymmetric red line for the Sino-American exchange rate. However, Chinese economic policymakers may be hesitant to let their currency depreciate past RMB$7-to-USD$1.

Any expectations of short-term currency misalignment can spur capital flight out of the Chinese economy. Chinese public corporations that list abroad have to make cash dividend payments in June each year; so foreign exchange order flows reveal substantive short-term pressure for these Chinese public firms to sell the offshore Renminbi. As China achieves a near-zero current account surplus in mid-2019, the Renminbi faces downward pressure. Renminbi depreciation has long been a major source of tremendous competitive advantage for China. It is important for the Sino-U.S. trade negotiations to level the playing field with respect to potential Renminbi currency misalignment.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Amy Chua and Jed Rubenfeld suggest that relatively successful ethnic groups exhibit common cultural traits in America.

Laura Hermes

2023-05-21 12:26:00 Sunday ET

Amy Chua and Jed Rubenfeld suggest that relatively successful ethnic groups exhibit common cultural traits in America.

Amy Chua and Jed Rubenfeld suggest that relatively successful ethnic groups exhibit common cultural traits in America. Amy Chua and Jed Rubenfeld (2015)

+See More

The Economist delves into the modern perils of tech titans such as Apple, Amazon, Facebook, and Google.

Jacob Miramar

2018-01-12 07:37:00 Friday ET

The Economist delves into the modern perils of tech titans such as Apple, Amazon, Facebook, and Google.

The Economist delves into the modern perils of tech titans such as Apple, Amazon, Facebook, and Google. These key tech titans often receive plaudits for mak

+See More

Former White House chief economic advisor Nouriel Roubini discusses the major limits of central-bank-driven fiscal deficits.

Rose Prince

2019-12-25 19:46:00 Wednesday ET

Former White House chief economic advisor Nouriel Roubini discusses the major limits of central-bank-driven fiscal deficits.

Former White House chief economic advisor Nouriel Roubini discusses the major limits of central-bank-driven fiscal deficits. The International Monetary Fund

+See More

CNBC news anchor Becky Quick interviews Warren Buffett in early-2019.

James Campbell

2019-04-07 13:39:00 Sunday ET

CNBC news anchor Becky Quick interviews Warren Buffett in early-2019.

CNBC news anchor Becky Quick interviews Warren Buffett in early-2019. Buffett explains the fact that book value fluctuations are a metric that has lost rele

+See More

Warren Buffett shares his fresh economic insights and value investment strategies at the Berkshire Hathaway shareholder forum.

Daphne Basel

2018-05-05 07:33:00 Saturday ET

Warren Buffett shares his fresh economic insights and value investment strategies at the Berkshire Hathaway shareholder forum.

Warren Buffett shares his fresh economic insights and value investment strategies at the Berkshire Hathaway shareholder forum in May 2018 despite the new GA

+See More

Daniel Goleman explains why working with emotional intelligence helps hone our social skills for smarter, better, and more effective leaders, teams, and organizations in modern life, business, innovation, and entrepreneurship.

Fiona Sydney

2025-07-05 11:23:00 Saturday ET

Daniel Goleman explains why working with emotional intelligence helps hone our social skills for smarter, better, and more effective leaders, teams, and organizations in modern life, business, innovation, and entrepreneurship.

Former New York Times science author and Harvard psychologist Daniel Goleman explains why working with emotional intelligence helps hone our social skills f

+See More